Ace Magashule vows South African Reserve Bank will be nationalised

Two ANC leaders singing different tunes around nationalisation of the reserve bank.

South African ruling Party African National Congress Secretary General Ace Magashule briefs the press on the outcome of the latest ANC National Executive Committee meeting on January 22, 2018 in Johannesburg, South Africa. GIANLUIGI GUERCIA/AFP/Getty Images

The ANC’s secretary-general, Ace Magashule has revealed the ANC’s plans regarding the South African Reserve Bank (SARB). A couple days after the party’s NEC had their Lekgotla meeting, Magashule has returned with shocking news of the party’s aim: to nationalise the central bank.

South African Reserve Bank targeted for nationalisation by the ANC

South Africa’s reserve bank is one of the fewest central banks, in the world, that have private shareholders.

As reported by The Citizen, the bank has over 261 000 shares split between more than 600 private shareholders, with Parliament only able to function in a supervisory role within the spectrum.

Many of these shares are owned by people who do not reside in South Africa, the majority shareholder being Michael Duerr, a German with a 57.5% ownership stake in the central bank.

The ANC, largely the Jacob Zuma and Julius Malema faction, has always pushed for amendments to the Reserve Bank Act. The purpose of this was to see the government take control over the decisions of the bank whose function is to oversee the policy activities of the broader economy.

Ramaphosa and Ace Magashule sing different tunes around central bank

The ANC’s stance on this controversial topic has wavered since President Cyril Ramaphosa took up office in February 2018. Just five days ago, Ramaphosa was assuring business leaders in the private sector that the reserve bank would remain independent.

“The independence, standing and the role of the Reserve Bank is sacrosanct and will remain independent,” he said.

Well, his subordinate, who was briefing the media on the outcomes of the lekgotla, sang a different tune.

According to Magashule, while the ANC was looking to take ownership of the central bank, it was also going to remain independent.

Magashule’s difference between ownership and independence

Something which made little to no sense because, in general terms, if one takes ownership of something it is no longer independent. Nonetheless, Magashule reiterated the fact that nationalising the central bank was one of the ANC’s critical conference resolutions — along with land expropriation — that was sworn upon at Nasrec.

“I think we are talking very clearly about the reserve bank here. I don’t know what you understand about public ownership (referring to the media). There is a clear distinction between independence and ownership.

“Ownership will be ownership by the public, that is called nationalisation, that is a conference resolution and we will be implementing that resolution” he said.

A flurry of mixed messages have been communicated by the party’s leaders on this very critical topic. It is expected that Ramaphosa, who is currently at the World Economic Forum (WEF) in Davos, will address the matter once more when he’s returned to South Africa.